Biden’s Banking Nominee Once Explored Idea of Eliminating Private Bank Accounts
Explored if Federal Reserve system offered deposit accounts, and private banks did not
Joe Biden's nominee for the Office of the Comptroller of the Currency (OCC), Saule Omarova, explored the idea of eliminating all private bank accounts and deposits.
Omarova made the remarks during the Law and Political Economy (LPE) Project’s “Law & Political Economy: Democracy Beyond Neoliberalism” earlier this year.
CORRECTION: A previous version of this article stated that Saule Omarova "demanded" all private bank accounts be eliminated and "vowed" to make it happen as comptroller of the currency. However, this is not accurate. While Omarova said that she wrote a paper exploring what would happen if the Federal Reserve system offered deposit accounts, and private banks did not, she did not demand such or system or vow to make it happen. We have now corrected this error and updated the title and article body to reflect this change. The story continues below.
In one of her papers, Omarova said:
“The People’s Ledger How to Democratize Money and Finance the Economy,” which would help “redesign” the financial system and make the economy “more equitable for everyone.”
She described the latter as a “private-public power balance” that would democratize finance to a more systemic level.
Omarova also said the Federal Reserve can only use “indirect levers” to “induce private banks to increase their lending.”
Her papers discuss eliminating all banks and transferring all bank deposits to “FedAccounts” at the Federal Reserve.
Omarova said during her conference speech:
“There will be no more private bank accounts, and all of the deposit accounts will be held directly at the Fed”:
Omarova said the proposal would give the fed a “proactive” monetary policy tool, such as “helicopter money.”
She also noted how the Federal Reserve could “take money” from Americans amid inflation.
According to a senior government official, if the Senate confirms Omarova, she would have the “most powerful, least accountable” position over America’s banking system.
The former government official said:
“The Democratic Party over the last couple of administrations, they want the government to essentially take over a lot of financial functions from banks.”
Twenty-one state financial officers called for Biden Biden to withdraw Omarova’s nomination due to her radical views.
The LPE serves as a platform to discuss:
The role of law and legal discourse in the creation and maintenance of capitalism and in mediating tensions between capitalist order and democratic self-rule. Scholars in our network work to understand the relationship between market supremacy and racial, gender, and economic injustice; to articulate the relationship between capitalism and devaluation of social and ecological reproduction; and to explore the distinctive ways that law gives shape to and legitimates neoliberal capitalism, ranging from dynamics of financialization to the relation between the carceral state and capitalism. We also seek to offer concrete legal reforms designed to move beyond neoliberalism and toward a genuinely responsive, egalitarian democracy, with critical attention to the need for power and movement-building as part of any such transformation. [Emphasis added]
Republicans already oppose Omarova’s nomination.
Sen. Steve Daines (R-MT) Omarova’s "Communist ideals” disqualify her for the position.
“Republicans will overwhelmingly oppose this self-described radical,” Sen. Pat Toomey (R-PA) told Axios.